Born in the Red: How Affirmative Action Could Cure the Race-Credit Divide

Existing academic literature has not directly addressed solutionsfor the race-credit disparity.Local, state, and federal agencies along with private organizations,have implemented various types of credit education programs.These programs have been largely unsuccessful.Federal legislation was passed...

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Bibliographic Details
Published inHouston law review Vol. 55; no. 5; p. 1157
Main Author Mack, Jordan
Format Journal Article
LanguageEnglish
Published Houston Houston Law Review Incorporated 01.04.2018
Subjects
Affirmative action
Bank loans
Banking
Consumer behavior
Credit discrimination
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Summary:Existing academic literature has not directly addressed solutionsfor the race-credit disparity.Local, state, and federal agencies along with private organizations,have implemented various types of credit education programs.These programs have been largely unsuccessful.Federal legislation was passed to make loan terms more transparent and loans more accessible. While arguably helpful to sophisticatedborrowers, data indicates that mandatory term disclosure does little to affect consumer behavior. More needs to be done in order to break the low credit score cycle. This Comment proposes an application of Affirmative Action principles to break the cycle and bring an entire underserved population into the modern banking and lending scheme, complete with reasonable interest rates, lower costs, and a decreased likelihood of default. Without significant and drastic changes, “the country is headed toward a kind of financial segregation.”
ISSN:0018-6694